Credit Card Questions

What are the benefits of having a credit card?
A credit card makes it easy to buy something now and pay for it later. It's much safer to use a credit card than to carry around cash. If you lose your credit card, you can ask your credit card company to cancel your card, and no one else can use it. But if you lose cash, your money is gone.

Credit cards are also convenient. You can use them to make hotel, car rental and other reservations. You can buy items over the phone or online. You can also use credit cards for emergencies, like unexpected car repairs, when you don't have the cash to cover the expenses.

Finally, using a credit card gives you a credit history, which helps to get home loans and other credit in the future.

What are the costs of having a credit card?
All credit cards have finance charges for not paying your balance in full each month, but you could save a lot of money by shopping around for the credit card that offers you the best terms. Key credit card terms to look at are the annual percentage rate (APR), annual fee, grace period, and late payment charges.

Shop for a card with a grace period that gives you enough time to pay your bills on time without charging you interest. Credit cards with no grace period start charging you fees as soon as you buy something on your credit card.

How long would it take me to pay off my credit card balance?
If you buy a big-ticket item like a TV or a new pair of shoes, you should know how much your purchase really costs if you charge it to your credit card and don't pay it off right away.

Where can I get a credit card?
Your postbox is probably full of credit card offers from banks and shops. Most banks and some SACCOs offer credit cards. A lot of major shops also offer credit cards now, and some companies offer only credit cards, like Virgin Money. The fees, charges and benefits for credit cards vary among different companies. When you're choosing a card, shop around. The bank where you hold a savings and/or checking account is probably the best place to start.

Some large shops also offer credit cards that only can be used in their stores. Usually, when you apply for a shop credit card, you get a one-time discount on your purchase that day. But these credit cards have limited uses and often carry high finance charges.

How do I get a credit card?
If you are at least 18 years old, have a regular source of income and good credit rating; you can probably qualify for a credit card. Before you submit a credit card application, order a copy of your credit report to make sure all of the information on it is correct.